What defines 'credit risk'?

Credit risk is fundamentally defined as the likelihood that a borrower will default on their debt obligations, meaning they may fail to meet the repayment schedule as agreed. This concept encompasses the overall risk associated with lending, directly relating to the borrower's capacity and willingness to fulfill their payment commitments.

Option A touches on the aspect of repayment but is limited in scope by only mentioning the aspect of a borrower paying back a loan. It does not encompass the wider implications and nuances of default risk management which includes potential losses if obligations are not met.

Option B references the economic stability of a country, which pertains more to sovereign risk or systemic risk rather than the specific assessment of a borrower's creditworthiness.

Option D addresses price volatility in assets, which relates to market risk rather than credit risk, indicating changes in values rather than the probability of default.

Therefore, the most comprehensive and accurate definition of credit risk is the likelihood of a borrower meeting their payment obligations, which is captured by the chosen answer.